5 Things Tenants With NRI Landlord Must Know

5 Things Tenants With NRI Landlord Must Know

5 Things Tenants With NRI Landlord Must Know

In the past decade, the Non-Resident Indian (NRI) investment in India's real estate, especially the luxury segment, has grown significantly. No wonder you would often find that premium properties situated at posh localities of Indian cities available for rent are owned by non-residents. However, having an NRI for a landlord also means taking certain additional responsibilities.

Deduct TDS

At the time of paying the monthly rent, you have to deduct TDA (tax deducted at source) of 30 per cent under Section 195 of the Income Tax (I-T) Act. Additionally, education cess will also be part of the overall tax liability. So the total deduction would add up to 30.9 per cent. As a tenant, you are responsible for carrying out this task and report it to the I-T Department.

You may also like to read: Everything A Homebuyer Needs To Know About TDS

You need a TAN

Because you are entrusted with the task of deducting tax, you need to have a Tax Deduction and Collection Account Number, commonly known as TAN Number. You will be using this 10-digit alpha-numeric identity to undertake all TDS-related business with the I-T Department. Additionally, you should also have a PAN (Permanent Account Number) card. PAN of your landlord will also be necessary to conclude the business.

Also read: Income Tax & NRIs: 10 Questions Answered

Fill the right form

Because you are sending money outside of India, you will have to seek the help of a chartered accountant fill the required forms and submit it online. There are two types of forms that a tenant with an NRI landlord has to fill.

You will have to fill Form 15CA if the single transaction amount does not exceed Rs 50,000, and the annual amount does not exceed Rs 2.5 lakh. You will be filling the same form if your landlord has received a certificate from the I-T Department directing you to lower the tax deduction.

You will have to fill Form 15CB if the remittance exceeds Rs 50,000 in a single transaction and Rs 2.5 lakh in a financial year.  In Form 15CB, several details pertaining to the TDS rate, the deduction and the DTAA (Double Tax Avoidance Agreement) are mentioned. An NRI may be liable to pay taxes in the country of his residence. These details will help them avoid it.

Credit money in the right account

The rent will have to be deposited in a non-resident ordinary (NRO) account of your landlord. This money cannot be credited in a non-resident rupee (NRE) account as long as you, too, are an NRI.

Also read: 3 Rules An NRI Investor Must Follow

Issue a certificate

After deducting TDS, a tenant must provide TDS certificate to his NRI landlord for income tax purposes.  An NRI can check TDS details from his Form 26AS.

Also read: Income Tax & NRIs: 10 Questions Answered

Last Updated: Wed Oct 03 2018

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